Under Armour (UA) Q3 Earnings & Revenue Beat Estimates

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Baltimore-based Under Armour turned in strong quarterly results and reiterated that it is on track to generate $7.5 billion in annual revenue by 2018, but its sales growth forecast fell short of Wall Street expectations. That's better than the $1.45 billion in revenue analysts polled by Zacks expected.

Shares of Under Armour (NYSE:UA) traded down 14.04% on Tuesday, hitting $32.58.

Under Armour saw sales and profits soar in the third quarter, driven by the popularity of the brand's basketball and running shoes and exposure through events such as the summer Olympics in Rio and New York Fashion Week.

"With 20%-plus top-line growth, UA remains the highest growth apparel/retail company in NA, well above NKE (topline growth of +MSD/+HSD) and LULU (+LDD), and we believe as a result demands a higher multiple", said Ms. Susan.

UA chairman and CEO Kevin Plank - who inked a deal with Kohl's Corp. earlier this year - said he'll continue to look to footwear and worldwide markets as the key drivers for the brand's long term growth. Footwear net revenues in the quarter rose 42% to $279 million, up from $196 million in Q3 a year ago, driven by strong growth in running and basketball.

The company's gross margins were squeezed by the timing of liquidations, increased promotions and foreign exchange rates, but the decrease in margins was partially offset by improvements in product cost margins. As overall apparel sales were slowing, Under Armour's apparel remained "incredibly profitable and still growing" at about 18% in the third quarter. Inventory at September 30, 2016 increased 12% to $971 million compared with $867 million atSeptember 30, 2015. The company projects interest expense of about $30 million for the year, down from the previous estimate of $32 million. It's evident after this quarter's earnings call that Plank and company are playing the long game, while Mir. UA has recorded a 50-day moving average of $38.64 and a 200-day moving average of $39.87. Vetr cut Under Armour from a "strong-buy" rating to a "buy" rating and set a $44.04 price target on the stock.in a research note on Wednesday, July 6th.

On the ratings front, Under Armour has been the subject of a number of recent research reports. Analyst had a consensus of $0.25. A Chief Information Officer in the company, Fipps Paul, on Thursday August 25, 2016 collected $83,480 from the sale of 1,980 shares at a per-share price of $42.92.

The firm lowered its price target to $40 from $55 but maintained its "buy" rating, according to TheFly.

Under Armour, Inc., incorporated on July 01, 1996, is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The stock has "Buy" rating given by Argus Research on Friday, July 31. The Company's divisions include North America, consisting of the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific; Latin America, and Connected Fitness.

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